Jack Dorsey is the only person who can be Twitter's next CEO
Getty Images/Michael Kovac
Twitter cofounder, and board member, Jack Dorsey, is stepping in as "interim" CEO while Twitter conducts a search for a CEO.
I believe the "interim" title will be gone by the end of the year. I believe Dorsey will be CEO.
Why? There's a number of obvious reasons.
First, and most importantly, I believe Dorsey wants to be the full-time CEO of Twitter.
On Thursday, The New York Times reported: "Ever since his ouster in 2008, Mr. Dorsey has wanted to return to the helm of Twitter, according to two people with knowledge of his thinking."
I interviewed Dorsey and Costolo after the shake up was announced. I twice asked Dorsey if he wanted to be CEO permanently . He didn't say no. Instead, he deflected: "Again, I'm not going to answer that because it's not my focus, it's not what I'm thinking about; I have enough to focus on."
The Square factor
One complicating factor is that Dorsey is currently the CEO of Square. Square started out as a company that was going to change how financial services and payments work. It has since scaled back its ambitions, and is now a enterprise company that helps small and medium businesses. It's a good business, but it's not a huge, sexy consumer facing company like Twitter.
Last year, in a story on Dorsey and Square, a Square employee told us Dorsey finds the idea of running $6 billion - or even $8 billion - enterprise payments company "boring."
Twitter would be much more exciting.
Square is reportedly set to IPO this year. In fact, it may have already filed a confidential registration. If this is true, then Dorsey can't bail on Square mid-process to run Twitter. It would be hard to run Twitter even as an interim CEO if he's also going on a roadshow to sell Square's IPO. (Square has been reportedly interested in an IPO for years now. So, this could just be another mistaken report. Or, Square could push back its IPO plans.)
One former executive at Square who knows Dorsey well thinks he will never leave Square, and believes he'd like to run both companies. "It wouldn't be easy, but he could do it." He thinks the desire is there, and this is a trial run to see how well both companies do under his leadership.
What happens to Square if Dorsey decides he has to choose, and chooses Twitter?
That's probably OK. Dorsey has assembled a solid team of executives. He can appoint one of them, probably Gokul Rajaram who is beloved, as CEO. It's a lot easier to find someone to run Square than it is to find someone to run Twitter.
It would be a hard job for an outsider
If Dorsey doesn't want to be Twitter's CEO, then Twitter's going to have a hard time finding a replacement.
Twitter's board will have Dorsey, Costolo, and Evan Williams on it. All three are former CEOs. That means that whoever comes in will have to deal with three people who have run the company and have strong opinions about how the company should operate.
If an outsider wants to rip up the current product roadmap, it's going to be mighty awkward with those guys sitting there.
Further, an outsider is exactly what Twitter doesn't need right now. While Twitter has 300 million monthly users, and annual revenue projected to be $2.2 billion this year, the company is in a delicate state.
Snapchat doesn't release monthly user data, but it says it has 100 million daily active users. We would guess that Twitter has ~150 million daily active users based on past data. That means Snapchat is likely to pass Twitter in daily usage pretty soon.
Michael Kovac/Getty Images for Vanity Fair
If an outsider comes in, he or she is going to install his or her own people as executives. That's just how it works. New executives would mean Twitter gets stuck in limbo as the new people adjust to their new company. Twitter can not afford to be stuck in limbo at a time when so much is happening.
Therefore, Twitter needs an insider.
The problem with Adam Bain
The only person other than Dorsey that makes sense as an insider is Adam Bain, who has successfully led the company's ad products.
Bain is well-regarded by people on Wall Street, and in the advertising industry. He's a smart, personable executive who helped create Twitter's ad products. Before he arrived at Twitter, the company was struggling to figure out revenue generating products. Now, it's not.
Alex Konrad at Forbes says Bain is the front-runner. (People close to the company told Business Insider the same thing before Costolo's resignation was announced.) Konrad also says more than half the company supports Bain.
Prince Alwaleed bin Talal, who owns 5% of Twitter, seemed like he would prefer Bain over Dorsey if he had to pick one. He doesn't mention Bain, but he describes the next CEO as someone that sounds a lot like Bain.
"Jack has another company called Square which requires a lot of attention and a full-time job round there. I believe and trust that Jack Dorsey is there on a temporary basis," Alwaleed told the FT. "The new leader has to have tech savviness, an investor-oriented process, and a marketing mentality."
The problem with Bain is that he's a business guy.
Twitter's biggest problem is the "product". How do you take this wonderful, real-time network, and make it appeal to billions of people?
The conundrum for Twitter is that what makes it great is what makes it terrible. People that love Twitter don't want a thing to change about it. They've been lucky because very little has changed.
But a billion people have tried Twitter and decided it's not for them because it's so overwhelming, and at times, weird.
Whoever takes over has to solve this riddle.
So, again, this brings us back to Dorsey as CEO as the only logical choice. He's a product-oriented founder. Dorsey will have the moral authority as the creator of Twitter to tweak it to make it more appealing to a broader audience.
When I asked Costolo about the executive shuffle and risk of disrupting the company, he said: "Well that would be true if it was someone from the outside, but we have the benefit of Jack being the chairman of the board, the inventor of the product, and a cofounder. He's already a visible leader within the company, he speaks to the company and in company events both in the US and abroad with some frequency. There's no one better than him to lead the company through a transition like that."
Costolo's answer would make sense if Dorsey was sticking around. But, if he's just there until they bring in an outsider, then it makes no sense.
Why not just make Dorsey CEO and be done with it? A source told us that this interim period allows Dorsey to adjust to life as the CEO of a public company. It allows the board to see how he handles the role. It also protects the board from shareholders if Dorsey is a mess.
Would Dorsey be a good CEO? That's hard to say. He was fired in his first stint as Twitter CEO, but he was young and undisciplined at the time. He's matured and developed into a capable CEO at Square. He has learned to delegate and trust people. He would have to do that at Twitter.
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